25th September 2005



One of the most irritating things about our government is the secrets it has from we, it's people.  I can actually see no legitimate reason whatsoever for failure of full disclosure of all government documents.

"What" you might ask "about Foreign Affairs?  Secret treaties, spys etc?".  Well personally, I do not think we need any secret treaties, or James Bond type spies.  We do not need to have secret negotiating positions on trade or diplomacy or politics.  In fact, I am not even sure that we need a diplomatic service, except maybe for the purpose of rescuing Australian citizens, or as an outpost where prospective visitors can apply for a visa.  As for information, well I have on my computer the newspapers (mostly with a comprehendable translation) and the TV and radio stations of the world.  From those I can glean (as well as a local diplomat could) what the national government (or the press baron etc) wants the people of that foreign country to think.  I can look at Blogs from around the world, and (depending on the level of government surveillance) from them I can obtain intelligence on what the people of that nation are actually thinking.

Or you might ask "Well what about secret police business, or surveillance of terrorists?  How could we operate paid informers, or undercover cops?".  My answer is that undercover cops are not very effective, often accused of "entrapment".  Also that there are too many "victimless" crimes, and that most crimes (theft, murder) could be solved by a universal public surveillance system.

You are of course unlikely to raise the issue that Parliaments or public servants should be able to keep details of their expenditure secret.

So what I would like to see is a public accounts webpage on which it is possible to trace every teabag of public expenditure, view the minutes and agenda of every government committee meeting, and be able (through the public surveillance network) to trace the movements of any of my fellow men as they traverse public space.

The incentive to criminal activity will disappear as the certainty of apprehension increases.  Already, intelligent white collar criminals will be curtailing their activities in anticipation of the software detection tools that will be available to the police of the next decade.  As the surveillance network widens, we are already hearing of criminals being apprehended as a result of public surveillance cameras.

This leaves only one more area of secrecy, and that is the secrets that government forces it's citizens to disclose.  I am talking about income and taxation.  Private citizens should be entitled to keep any secrets that they desire.  Governments should not force citizens to disclose private information.  This means getting rid of income tax.  How can that be achieved?  quite simply, by taxing land.  Land is not "private", although we have the illusion that it is.  If you think otherwise, just try not paying your council rates, or preparing illegal drugs on "your" property, or shooting trespassers.


Most of the English speaking world is suffering from what is variously described as a real estate "bubble".  The Economist believes that there is either a spending glut in the USA, or a savings glut in the East, with the UK & European  & Japanese regions being sorta somewhere in between.

Nobody really seems to understand what is happening.

OK.  Here is diarist's version of what is happening.  I have stated on several earlier posts that structural changes in technology mean that Capitalism is now as dead as Feudalism in the early 1800's.  Here is the where, how & why.

Land is undertaxed, and there are too many infrastructure monopolies.  This has for the past few years produced (unrecognized) raging disinflation.   About the only things not deflating are infrastructure monopolies (includes minerals) and Real Estate, and these rises balance out the price falls in whitegoods, food and apparel.

You might argue that Inflation is low, and that Real Estate and the stockmarket are rising.  So where does that leave Diarist's argument that Capitalism is dead?

Real Estate and the Stockmarket are rising because there is a surfeit of capital with nowhere to go.  The overabundance of capital has come about because of government intervention (e.g the laws requiring contribution to retirement funds is an example).  That money has driven interest rates down, and driven the price of Stocks, Bonds & Real Estate over the moon.

Now that large corporations are no longer a safe haven for investment (think GM, FORD, Airlines) our Khans of Capitalism (aka the Investment Banks & Funds) are subverting the legislative process to obtain investment access to infrastructure monopolies.  (Much like the Feudal Lords of an earlier era had enacted e.g. the Corn Laws to protect their monopoly on primary production).

What are infrastructure monopolies?  Well take for instance transport or mining.  By it's very nature, transport infrastructure (roadways and airports) is a monopoly.  It is not viable to duplicate a transport system, so it is a monopoly.  There is only one set of minerals in the ground, so after the finder's fee, that also is a monopoly.

Monopolies should be publicly owned.  The monopoly activity can be financed by tender, built by tender, operated by tender.  Profits from the sale of the monopoly product should be paid into public revenue.   Pricing control for transport, mining or the "local loop" infrastructure monopolies should most certainly not be handed over to the Khans of Capitalism.

What about Real Estate?  Diarist suggests that we abandon Income Tax & Sales Tax, instead collect a significant proportion of Federal & State revenue from property tax.  This will have several desirable effects.
  1. Real Estate will no longer be a "sure bet" for investment of capital.
  2. The price (and UCV) of land will drop, and real estate bubbles will become things of the past.
  3. Small business will benefit, since the tax compliance burden will have vanished.
  4. The tax surplus can be paid equally back to all citizens, replacing all social welfare programs, school aid etc.
Let me illustrate how these rules might apply to farms.  Much of the capital value of a farm is anticipation of future capital gains.  Given a real estate tax that will block capital gains, the value of a farm would be based on it's potential profitability, which is the margin between ebit and tax. (ebit=earnings before interest & tax).

I would not suggest that these changes be introduced immediately.  Existing land taxes should be incremented gradually (in steps of say 5% - 10% per annum e.g. from 0.5% of UCV (Unimproved Capital Value) to 0.525% or 0.55% of UCV), and existing income taxes, Sales taxes & etc should be reduced commensurately.  Publicly owned infrastructure such as the local loop & transport networks, power & water distribution infrastructure and the like should be put to tender for operation/management, a lot like our garbage collection.

Social Security payments would be replaced by a negative income tax.  Most pensioners and employees would find that their circumstances were not changed radically.  There would be fewer public servants collecting taxes and disbursing pensions.

Hopefully, in an orderly transition, Real Estate would stop bubbling and cool off as business began to expand at a higher rate.

- IRAQ -

The indications are that the Iraq invasion has failed.  Full credit to the victor who skilfully exploited the ethnic schisms in Iraq, the idealism of the Western peacenik movements and the gullibility of Liberal journalism.  But it must be said: while the strategic arguments for the invasion were compelling, the risks were equally high.  America did not learn the lessons of Kosovo.  That lesson is, a vocal government (or bunch of criminals - take your pick) in exile is not a viable government.  Invasion worked in Afghanistan, where I understand the Taliban must pay double the government wage to recruit fighters.  It is failing in Iraq.

There are signs everywhere.  The Saudi princes are warning of the imminent problems.  Riverbend is a mirror of the confusion that seems to be universal.  The new constitution is defective.  Perhaps the only solution is to start out over, and elect a new college to devise a constitution, with a framework that is flexible enough to not fail, yet firm enough to guarantee those minimal liberties from which full liberty can be established.  (I am thinking of freedom of speech, a regular guaranteed democratic election of representatives, some sort of independent judicial system that can insist and hold government responsible to the constitution.)

If things go wrong, chances are, Iraq will split into three.   The Shia section in the oil rich Basra region would probably unite or confederate with Iran and make problems with the Shia groups in the oil rich Saudi border regions.  The Turks will want to take over the oil rich Kurdish sector in the north.  They might meet some opposition there.  (How they must regret not helping out with the original invasion!).  The Sunni triangle around the modern (let anyone who believes otherwise read these road rules, which could equally apply in NY, LA or Sydney) city of Baghdad, not being a viable economic entity, will probably federate with Syria, (not that anybody wants that, but alone Baghdad is not viable.)


Mark Latham was the leader of the Australian Federal opposition until the election last year.  Shortly thereafter he left Parliament, and has just published his diary of events.

This expose of the action behind the libel curtain around politics is not really news to anyone.  We the people already sense that most journalists are envy driven liberals, that most politicians are politically corrupt, but that the way our constitution is framed, these are a necessary evil.   Mark Latham has probably added something to the debate by categorically stating that the labour party cannot be reformed.  I believe that, despite Malcolm Turnbull's (press baron supported drive to conservative) idealism, that the Liberal coalition also is beyond reform.

I do not see any possible improvement short of introduction of direct government, as set forth by Pauline Hanson, as exists in about half of US states, as exists in Switzerland.  As it stands, our elected so called representatives rule unfettered between elections.  The only solution is to apply the manacles of public intervention.